Guest was running fine in VirtualBox 4.3.6 with Guest Additions 4.3.6. Updated to VirtualBox 4.3.8. Ever since I updated Guest Additions to 4.3.8, the guest does not boot successfully, instead it boots to Recovery mode.

Your workaround description was helpful, but I wanted to add that during the time I had 3d acc. enabled to gain access to the Windows environment so I could rollback drivers, I was experiencing black screens and artifacted redraws, which I was able to abate by changing from fullscreen to windowed mode temporarily. I thought this might be helpful to others.

I'm not able to reproduce this, at least not with a Windows 8 guest (which the original report is for). We will also try a Windows 8.1 guest.

From the comments above I read two important facts: (1) There is apparently a regression with the 4.3.8 Windows Guest Additions. And (2), this applies only to VMs which have 3D support disabled in the VM settings, is that correct?

Attached log demonstrating the issue in a freshly installed Windows Server 2012 R2 Evaluation (Datacenter with GUI) VM. I assume you can check the VM configuration in the log file. Note that 2D video acceleration is turned on, but 3D is off.

These are the only things I did in the VM:

Install Windows Server 2012 R2 Evaluation (Datacenter with GUI)

Install language pack

Install Windows Updates

Minor adjustments: change computer name, time zone, screen resolution

At this point, I shut down the VM, took a snapshot, and booted up. Tried to install Guest Additions. About halfway through the installation, the VM suddenly reset with no warning.

The OS was able to boot up again. I could log in, and received a message from Windows telling me the PC was unexpectedly shut down.

I shut down the machine again, and saved the log.

In the log, you can see the following events:
00:03:16: Guest Additions installation
00:03:33: Reset initated by ACPI

I had the same problem with:
host: Win 7 Home Premium x64
guest: Win 8.1 Pro x64
but I took snapshoot after pure install of Win 8.1 and was able to rollback every unsuccesful attempt of installing guest additions.

I can confirm some of chrisse's observations, and conclude the following:

The problem for me occurs when 2D Acceleration is ENABLED, but 3D Acceleration is DISABLED.
The problem for me does not occur when BOTH 2D Acceleration and 3D Acceleration are disabled, or both enabled.

For me it looks like the problem is 3D acceleration. I had it enabled, tried to install the Guest Additions, and the install crashed. I disabled 3D and was able to install, and reboot and everything looks fine. I re-enable 3D and it boots, but then hangs when the additions load. This is quite reproducable. I attach a log of a start attempt with 3D enabled. I just ticked 3D and start. As soon as the system tray icon appears the system hangs and I have to power off. In this case I switched to another VM, and when I came back the screen was black, and VB stopped responding. When I restarted the VM it went to the Windows repair screen.
Hope this helps
Malcolm